While critical US inflation data is awaited for Bitcoin and altcoins today and investors are wondering when BTC will start to rise, Singapore-based crypto trading platform QCP Capital announced its expectations. QCP Capital analysts stated that DXY is at risk of falling, and BTC could rise in return. They noted that any positive news from the macroeconomic front could trigger a sharp liquidation of long positions in DXY, increasing downward pressure and leading to a decline in DXY. They also highlighted that a possible decline in DXY could send risky assets like Bitcoin soaring. At this point, QCP Capital stated that the January US CPI data could act as a catalyst for a significant decline in DXY and bring an increase to BTC.
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However, analysts noted that this situation may not immediately lift the cloud of decision on Bitcoin. At this point, analysts also stated that the large-scale liquidations in Bitcoin and altcoins last week led to a significant decrease in trader participation, and that for investors with long positions, it may be the best strategy to follow institutional flows and buy downside protection.
“Given that negative news is likely priced in, we believe the USD now faces greater downside risk. Any positive news could force USD long positions to be closed en masse, potentially sending the riskier asset higher. Today’s CPI data could be the catalyst that triggers a sharp downward move in DXY. For participants still holding long positions in crypto, following institutional flows and buying downside protection may be the best strategy, especially since put options remain relatively cheap for now.”
*This is not investment advice.